Making Tax Digital (MTD) for VAT is now mandated, by law, for all VAT registrations.
There is a requirement for VAT registered traders to keep digital records, ensure digital links between data sources used to compile the VAT returns and to submit that VAT returns from Functional Compatible Software. This has been a significant change in recent years, fully implemented earlier this year when it was mandated for all VAT registrations.
HM Revenue & Customs have now confirmed that from Tuesday 1 November 2022, VAT registered businesses will no longer be able to use their existing VAT online account to file their quarterly or monthly VAT returns. Businesses that file annual VAT returns will still be able to use their VAT online account until 15 May 2023. If VAT registered businesses do not sign up for MTD and file their VAT returns through MTD-compatible software, they may have to pay a penalty.
Some exemptions are available, but these have to be applied for and are often only accepted in a few circumstances – for more information read: https://www.gov.uk/guidance/apply-for-an-exemption-from-making-tax-digital-for-vat.
As a Xero Platinum Partner, we have helped our clients get ready for the change that MTD brought, but the signal from HM Revenue & Customs that they will remove the old functionality will undoubted force any non MTD Registered traders to make the change.
If you are yet to convert and need any assistance please do get in touch with our Management Services team who will be happy to help – please call 01242 776000 or use our contact form.